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Westlake Chemical Hits New 52-Week High: What's Driving It?

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Shares of Westlake Chemical Corporation (WLK - Free Report) scaled a fresh 52-week high of $107.51 on Dec 29, before eventually closing the day at $106.53.

Westlake Chemical has a market cap of roughly $13.8 billion. Average volume of shares traded in the last three months is around 800.2K. The company has an expected long-term EPS growth of 10.6%.

Notably, Westlake Chemical has an impressive earnings surprise history as the company has topped the Zacks Consensus Estimate in the trailing four quarters, with an average positive surprise of 23.5%.

Shares of Westlake Chemical have rallied 59.1% in the past six months, outperforming the industry’s 34% growth.


Driving Factors

In the third-quarter call, the company benefited from increased demand for all major products in both Vinyls and Olefins segments along with higher prices in the Vinyls segment. The company sees increased ethylene availability with the start-up of new ethylene plants and completion of capacity expansions.

Westlake Chemical is likely to continue to benefiting from the Axiall acquisition. The acquisition has diversified the company’s product portfolio and geographical operations, creating a North American leader in Olefins and Vinyls. The company is on track to realize around $120 million in synergies and cost savings related to the buyout in 2017.

The Axiall buyout and continued investments to improve the reliability and operational efficiency of its assets will help the company leverage the improving Vinyls market. The company will also likely benefit from  favorable demand trends for all of its major products, going  ahead.

Westlake Chemical Corporation Price and Consensus

Zacks Rank & Stocks to Consider

Westlake Chemical carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Koppers Holding Inc. (KOP - Free Report) and Huntsman Corporation (HUN - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kronos Worldwide has expected long-term earnings growth of 5%. Its shares have skyrocketed 113.2% yearly.

Koppers has expected long-term earnings growth of 18%. Shares of the company have rallied 25.2% yearly.

Huntsman has expected long-term earnings growth of 8%. Its shares have soared 72.9% year to date.

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